Suppose Blank Company Has Only One Project, as Forecast Above

question 56

Multiple Choice

Suppose Blank Company has only one project, as forecast above, and an unlevered cost of equity of 8%. If the company uses no leverage, what is expected return to equity holders?

• A) 8.0%
• B) 11.6%
• C) 9.33%
• D) 30.0%

---

Definitions:

Good

A tangible product used to satisfy human wants.

Basic Economic Problem

The fundamental issue of scarcity faced by societies, where there are limited resources to meet unlimited wants and needs.

Scarcity

The fundamental economic problem of having seemingly unlimited human wants in a world with limited resources.

Industrialized

Pertains to countries or regions that have developed complex and diverse economies with extensive industrial activity as compared to agriculture or primary production.